Genesis Energy Limited · NZX:GNE
Genesis Energy — H1 FY2013 Earnings Presentation
20 slides from Genesis Energy's earnings presentation, Feb 26, 2013
Slide 1: 2013 Interim Result
2013 INTERIM RESULT 2013 Interim Result Six months to 31 December 2012 PROVEN STRATEGY DELIVERS EXCELLENT RESULTS Albert Brantley CHIEF EXECUTIVE Andrew Donaldson CHIEF FINANCIAL OFFICER 26 February 2013 1
Slide 2: Disclaimer
DISCLAIMER This presentation may contain projections or forward looking information (“Forward Looking Statements”). Such Forward Looking Statements are based on current expectations and involve risks, uncertainties and assumptions. Forward Looking Statements are not guarantees of future performance
Slide 3: Introduction: Sound strategy delivering results
Introduction Sound strategy delivering results Albert Brantley Chief Executive 26 February 2013 3
Slide 4: Performance overview
Performance overview • Sound strategy, delivering results • Diversity of assets driving consistent EBITDAF, higher net profit • NPAT up 85% to $71m from $38m in H1 2012 • EBITDAF up 3% at $196m ($190m), despite revenues being down 7% • Return to dividends with interim dividend of $57m declared • Str
Slide 5: Ensuring Reliability
Ensuring Reliability • Investing in our diverse, flexible and strategic assets • Tekapo Canal Remediation Work • Projected cost of $145m to $155m over two 14 week outages in FY13 and FY14 • Ensures long life of canal asset • Huntly Unit 5 • 38 day outage after 50,000 operating hours • Plant in excel
Slide 6: Leading retailer
Customer Experience Leading retailer • 664,000 customers - stable in a competitive market • Growing South Island customer base as proportion of total – up 25% to 75,762 • 300,000 Advanced Meters installed, 60% of customer base • Continued multi-rate tariff trials and HomeiQ products • Tomorrow Stree
Slide 7: Providing flexibility
Diverse portfolio Providing flexibility • Total generation down 5% to 3,786GWh (3,983GWh in H1 2012) • Thermal down 10% to 2,273GWh (2,524GWh) • Renewable up 4% to 1,513GWh (1,460GWh) • Huntly Power Station overall output lower due to Unit 5 planned outage and Unit 3 storage • Coal-fired generation
Slide 8: Huntly Power Stations
Energy Management Huntly Power Stations • Major lifecycle milestone for Unit 5 (400MW CCGT) • First (6 yearly) major outage at 50,000 operating hours for maintenance 15 October to 23 November 2012 • Plant in excellent condition • Coal/gas fuelled units commercial approach – only run if price covers
Slide 9: Demand-side focus
Creating Options Demand-side focus • Generation market is currently fully developed • Our generation projects give us future options • Castle Hill Wind Farm and Rodney thermal site consented and are options for the future • We will invest in new plant only if it’s more economical than buying from th
Slide 10: Safety is a priority
Our People Safety is a priority • ZERO harm strategy delivering results • Lost time injuries down, medically treated injuries down • Committed to developing our people • Low turnover rates in employees, well below industry norms in technical, operational and customer service areas • Workplace among
Slide 11: Strong result, return to dividends
Financial results Strong result, return to dividends Andrew Donaldson CFO 11 11
Slide 12: Strong result driven by business diversity
Financial results Strong result driven by business diversity • Diverse generation portfolio delivering consistent results Genesis Energy’s strategies of optimising • Increased hydro generation offset by lower its generation portfolio thermal generation and focusing on its • Depressed wholesale elect
Slide 13: Profit and Loss Highlights
Financial results Profit and Loss Highlights • Revenues down 7% to $1,031m • EBITDAF up 3% to $196m YEAR H1 2013 H1 2012 change FY 2012 • Net profit after tax up at $71m $m $m % $m from $38m in H1 2012 OPERATING REVENUE 1,031 1,112 -7% 2,270 OPERATING EXPENSES 835 921 -9% 1,878 • EBITDAF margin at 1
Slide 14: Consistency in EBITDAF over last 2 years
Financial results Consistency in EBITDAF over last 2 years Hydrology and wholesale price is a less significant driver than in previous years • Wholesale prices in H1 2013 close to 20% lower than H1 2012 • Consistency reflects return on Kupe and Tekapo contribution • Diversity now also driving consis
Slide 15: Segment analysis (EBITDAF)
Financial results Segment analysis (EBITDAF) • Increase in EBITDAF in H1 2013 vs H1 2012 due to improved Energy Management result: • Proportionally lower operating costs • Lower cost of generation (ie fuels consumed) • Kupe result lower due to planned outage • Lower oil and gas sales volumes in Q2 2
Slide 16: Improved Balance Sheet and Cashflow
Financial results Improved Balance Sheet and Cashflow • Debt down 18% vs H1 2012 and by $74m since 30 June 2012 YEAR H1 2013 H1 2012 Change FY 2012 • Debt re-profiled with lower interest $m $m % $m cost and longer maturity Total assets 3,560 3,620 -2% 3,636 • BBB+ rating maintained Total liabilities
Slide 17: Debt profile
Financial results Debt profile • Debt amounts and maturity show flexibility in profile • No significant maturities until 2016 • Significant headroom at current levels of debt • Current markets providing opportunities to further optimise debt profile and interest costs 26 February 2013 17
Slide 18: Dividend payments return
Financial results Dividend payments return Genesis Energy will pay a dividend that provides shareholders with a consistent, reliable and attractive return, even in periods of business cycle downturn. • Interim dividend of $57m declared • First dividend to be paid since FY 2010 • In line with plan to
Slide 19: Consistency in earnings is key
Financial results Consistency in earnings is key • Some growth through better portfolio optimisation and growth in retail margins • Costs under control • Earnings consistency key for return to regular dividend payments • Tekapo canal remediation is the major capex commitment over next few years • EB
Slide 20: Conclusion
Conclusion Delivering consistent results, supported by optimised operational performance and committed people. Albert Brantley - Chief Executive 26 February 2013 20 20